Singapore - Gold gained the most in a week after data showed China’s inflation accelerated more than estimated in June, boosting demand for the precious metal as a hedge.
Gold for immediate delivery climbed as much as 1.9 percent, the most on an intraday basis since July 1, to $1,260.70 an ounce and traded at $1,257.17 by 3:14 p.m. in Singapore.
Prices climbed 1.1 percent yesterday as the Dollar Index declined from a three-year high.
China’s consumer price index rose 2.7 percent from a year earlier, the National Bureau of Statistics said today, compared with a median estimate of 2.5 percent in a Bloomberg survey.
Bullion slid 23 percent last quarter as some investors lost faith in the metal as a store of value and Federal Reserve Chairman Ben S. Bernanke said the Fed may slow asset purchases this year if the economy continues to improve.
“Part of the move lower in gold was the thinking ‘perhaps we’ll never have to worry about inflation again’,” said Steven Dooley, head of research at Forex Capital Trading Pty in Melbourne.
“We saw a big burst of buying after the Chinese data today.”
Assets in the SPDR Gold Trust, the world’s biggest exchange-traded product backed by the metal, have slumped 30 percent this year to 946.96 tons yesterday as global equities rallied and the unprecedented money printing by central banks around the world failed to spur inflation.
Total holdings in gold-backed ETPs fell below 2,000 tons yesterday, for the first time since May 2010, according to data compiled by Bloomberg.
Inflation Outlook
Expectations for increases in US consumer prices, as measured by the break-even rate for 10-year Treasury Inflation Protected Securities, fell 15 percent this year.
Gold for August delivery rose 1.7 percent to $1,255.50 an ounce on the Comex in New York, extending yesterday’s 1.8 percent advance.
Cash bullion of 99.99 percent purity climbed 2 percent to 256.20 yuan a gram ($1,299.83 an ounce) on the Shanghai Gold Exchange.
Silver for immediate delivery jumped 1.4 percent to $19.3823 an ounce.
Spot platinum rose 1 percent to $1,372.50 an ounce.
Palladium gained as much as 1.2 percent to $704.80 an ounce, the highest since June 19.
Miners at Anglo American Platinum, the world’s biggest producer, returned to work following a strike, Bongeka Lwana, a spokeswoman for the Johannesburg-based company, said in an e-mailed statement today.
About 5,600 workers went on strike at two of the company’s mines in South Africa, demanding that suspended union officials were reinstated and planned job cuts scrapped. - Bloomberg News